CCI investigation notwithstanding, cement manufacturers are set to hike the price of the commodity from mid-January. Usually construction activity peaks after Sankarnti and the cement manufacturers increase the prices during this period of the season.
Moreover, cement manufacturers have a better reason for price hike this time as the cost of production has gone up. Pet-coke prices are inching up since last few months owing to skewed demand-supply as the refineries are running at lower capacities and ocean freight charges are hardening. Cement manufacturers have started shifting to imported coal for their energy requirements which has started moving up as well. Also, the cement manufacturers expect higher diesel prices and normalisation in cement demand would lead to increased road freight going forward. Due to these factors, cement manufacturers are forced to hike price to maintain their margins.
However, December was slightly disappointing for the cement manufacturers as the demand failed to pick up to the expected levels. According to analysts, paucity of funds, divergent views of centre and state governments in key states, severe cold weather in northern parts of the country, agitation of farmers blocking the movement of goods and fear of second wave of pandemic collectively have impacted demand revival. In December 2020, five top cement companies were investigated by the Competition Commission of India (CCI) for uncompetitive measure to hike prices though no stern action or further investigations has followed yet. All these factors had their impact on demand during the month.